💰MONEY MEASUREMENT CONCEPT OF ACCOUNTING

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ALL ABOUT ACCOUNTING :- 19th blog

       ☆☆☆ACCOUNTING ☆☆☆

Hi freinds., 🙏

Today's discuss 2nd concept of accounting....

                                             So let's discuss ..... 

 ★ MONEY  MEASUREMENT :-
This concepts assumes that all business transactions must be in terms of money, 💰 that is in the currency of country. In our country such transactions are in terms of rupees. 
Thus, as per the money 💰measurement📏 concept, transactions which can be expressed in terms of money are recorded in the books of accounts. For example, sale of goods worth rupees ₹1,00,000, purchase of raw materials of ₹ 60,000, Rent paid ₹ 5,000 etc. are expressed in terms of money, and so, they are recorded 🔘 in the books 📚 of accounts. But the transactions which cannot be expressed in monetary terms are not 🙅 recorded in the books of accounts. For example : Sincerity,  loyalty, honesty of employees are not recorded in books of accounts because these cannot be measured in terms of money although they do affect the profits and losses of the business concern. 

Another aspect of this concept is that the records of the transactions are to be kept not in the physical units but in the monetary unit. For example, at the end of the year 2020, an organization may have a factory 🏭 on a piece of land measuring 15 acres,  office 🏢 building containing 100 rooms, 30 personal computer,  25 office💺chairs and tables,  150 kg of raw materials etc. These are expressed in different units. But for accounting purposes they are to be recorded in money💰terms I.e.  in rupees ₹. In this case the cost of factory 🏭 land may be say rupees 25 crore,  office building of ₹ 10 crore,  computer 💻 ₹ 5,00,000, office chair 💺 rs 1,00,000, raw materials of rupees 20,00,000. Thus the total assets of the organization are value at ₹ 35 crore and 26,00,000. Therefore the  transactions wich can be  expressed in terms of money is recorded in the accounts books,  that too in terms of  money and not in terms of the quantity. 



★Remaining 7 concepts discuss in 20th blog....★ 
                                      
                                       So wait my 20th blog....★

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